Bidders Pile in for GM's Saab Unit

Formula One tycoon Bernie Ecclestone and partner Genii Capital made a last-ditch effort to buy General Motors Co.'s Saab unit as the U.S. carmaker presses ahead a wind-down of its Swedish brand.

Genii Capital, the Luxembourg-based private-equity firm that agreed to acquire a majority stake in Renault SA's (RNSDF) F1 team last month, submitted a cash offer yesterday, said Lars Carlstroem, the Swedish investor working with Genii. Dutch super-car maker Spyker Cars NV (SPYKR:NA) put in a revised bid.

Forbes' 2009 list estimates Ecclestone and his family's net worth at $3.7 billion. After two attempts to sell the 72-year-old Saab brand failed in the past two months, GM CEO Ed Whitacre said this week that the Detroit carmaker was proceeding with a decision to close Saab and that no qualified buyer had emerged. Saab's board met today and decided to liquidate the automaker.

"It's a good brand that has probably been neglected by the current owners," Ecclestone, 79, said in a phone interview late yesterday. "We don't own it yet, so let's see what happens."

Ecclestone, a former second-hand car salesman, made his fortune by building Formula One into a $1 billion series since taking control of the television rights in 1981. He sold most of his 25 percent stake in the business to CVC Capital Partners Ltd. in 2005, remaining CEO of the sport that he runs from London.

In 2007, Ecclestone bought Queens Park Rangers, a second-tier London soccer team, with former series team manager Flavio Briatore for 14 million pounds ($22 million). Billionaire Lakshmi Mittal took a 20 percent stake four months later.

'Real Easy'

Genii said it will bid for a majority stake in Saab together with Ecclestone. In a statement, the private-equity firm said that "given an adequate and short timeframe for finalizing its offer, it will aggressively work toward a successful closing of the transaction with all relevant stakeholders of the company."

Ecclestone declined to discuss financing for the bid.

"It's real easy—show up with the money and you can have it," Whitacre told a roundtable of reporters Jan. 6, when asked whether GM had made a good-faith effort to sell Saab. GM doesn't foresee a sale, he said.

In a statement today, GM said it picked AlixPartners LLP to supervise an "orderly" wind-down of Saab and the process could take "several months." Albert Koch, vice chairman of Southfield, Michigan-based AlixPartners, is acting as chief executive officer of the old GM, known as Motors Liquidation Co.

'Will Evaluate'

GM also confirmed that it received "several" proposals for Trollhaettan, Sweden-based Saab and would continue to evaluate them. GM could still decide to accept a bid in spite of the wind-down, a person familiar with the matter said yesterday.

Another group of investors has submitted a bid, according to former Swedish Deputy Prime Minister Jan Nygren.

"I am part of a group that formally made a bid for Saab to GM's adviser Deutsche Bank (DB)," he said by telephone. "I honestly don't know what happens next, we are waiting to hear from GM."

Nygren is joined in his bid by former MAN SE (MAGOF) CEO Hakan Samuelsson, Sweden's Dagens Industri reported, without citing anyone. Nygren declined to identify his partners or discuss the bid's details. Samuelsson couldn't immediately be reached to comment.

"I nearly fell off my chair," said Stephen Pope, chief global strategist for Cantor Fitzgerald in London, when asked about his reaction to the Genii offer. "If Genii Capital and Mr. Ecclestone were so keen on this prospect, why wait till the last minute?"

BMW, Porsche

GM is probably evaluating how much it would cost to close down Saab in comparison to the payment the company could get for the unit, Pope said. Some of the buyers may demand a commitment from GM, for example in technology sharing, he said.

Negotiations to sell Saab to Spyker collapsed Dec. 18 and Spyker submitted a second offer Dec. 20, which it further revised yesterday.

"Now there's nothing more we can do, we just have to wait and see," Chief Executive Officer Victor Muller said. "Whoever is the shepherd of Saab, the main thing is that it survives."

Genii plans to use former bidder Koenigsegg Group AB's Saab business plan and make the automaker profitable by 2012 with production of 105,000 vehicles a year, Carlstroem said.

Genii "loves brands and Saab is a strong brand on the same level as Porsche and BMW," he said.

"A group of Wyoming investors and Saab management" also made an offer for Saab, Merbanco Inc. President Chris Johnston said in a phone interview. Wyoming-based Merbanco was among suitors that lost the bidding in June to Koenigsegg, a person familiar with the process said at the time.

Detroit Meeting

Saab is among four brands, along with Pontiac, Saturn and Hummer, being unloaded as GM focuses on Chevrolet, Buick, GMC and Cadillac in the U.S. after its July 10 bankruptcy exit.

Saab sales in the U.S. slumped 59 percent to 8,680 vehicles last year. European deliveries through November also fell 59 percent to 25,093 cars, compared with the market's decline of 2.8 percent in the period.

A Swedish government delegation will travel to Detroit tomorrow and meet with GM's management next week to discuss "questions and question marks around the potential sales process" of Saab, said Haakan Lind, a government spokesman.

Sweden will tell GM what it's prepared to do to increase the likelihood a loan for Saab from the European Investment Bank, the European Union's lending arm, "if a bidder emerges that GM thinks is sufficiently interesting," he said.

Swedish sports-car maker Koenigsegg, which had backing from Beijing Automotive Industry Holding Co., walked away from a deal to buy Saab in November. Beijing Auto paid $200 million to buy some car technologies from Saab to use in its own vehicles.

Saab board member Haakan Danielsson, who is also head of Saab's engineering union, said worker representatives protested the liquidation decision at the board meeting. IF Metall union Chairman Stefan Loefven said it's "irresponsible of GM to act in two separate directions, both toward a sale and liquidation,"

"I can only interpret this as GM doesn't want to sell Saab," Danielsson said.